SoftBank-owned Arm aims to raise $8 billion in an upcoming IPO

SoftBank Group Corp-owned chipmaker, Arm Ltd., which is headquartered in the UK, is planning to hold an IPO in the near future. However, according to people familiar with the plan, the company plans to target quite an impressive figure — $8 billion. The stock market launch is expected to be a massive US blockbuster, according to insiders.

The sources further shared that Arm is expected to submit paperwork for the public offering in late April. The people familiar with the matter have decided to remain anonymous, as the discussions involving the firm’s plans are still considered confidential. As for the listing itself, the sources noted that it is expected to happen later in the year. The exact timing was still not determined, as it depends on the market conditions.

As for SoftBank, Arm’s parent company, based in Japan, it has allegedly selected four investment banks that will lead the offering. SoftBank has high expectations of the upcoming IPO, and it believes that it will become the most high-profile stock market flotation in recent years.

The banks selected to lead the IPO include JPMorgan Chase & Co, Goldman Sachs Group Inc., Mizuho Financial Group, and Barclays. However, the sources also added that no bank was selected for the “lead left” position at this point.

With these decisions out of the way, England-based Arm is expected to start the preparations for the IPO in days to come. As mentioned, the public offering will take place in the US, but the valuation range has not been finalized yet. Arm is hoping to see the valuation reach $50 billion or more during the share sale, but the final figure has yet to be decided.

Experts say that Arm’s public offering might re-awaken the IPO market

If Arm manages to achieve a successful listing before the end of the year, it will certainly contribute to the IPO market. The IPO market has been mostly frozen ever since Russia invaded Ukraine in February 2022, as the incident triggered massive market volatility. Tech stocks have suffered great losses, in particular, as massive sell-offs started taking place across the industry.

There were instances where the IPO market briefly came back to life, such as last month, when multiple companies listed their shares on the US stock exchange. However, the investors did not take things further, as the majority remain very cautious when it comes to engaging with new stocks.

Moving forward, IPO advisors do not expect for the capital markets to see a full recovery, at least not until the second half of 2023. As for Arm, it did say last week that it intends to pursue US listing, rather than return to the London stock market. However, it refused to comment on the new leaks and rumors, and so did Goldman Sachs and Mizuho, while SoftBank, JPMorgan, and Barclays did not respond to requests for comment as of yet.